Myths of Lean Six Sigma October 18, 2017 By: Claudia R. Wolter Typically when we hear Lean Six Sigma (LSS) we think of large manufacturing corporations. But is that really an accurate representation of who is using LSS? LSS is a proven methodology that has been successfully implemented by many organizations, large and small, service and manufacturing, over the past several decades. Due to the speed of change today, we need to transform processes rather than just change them. Transformation lead to the Netflix subscription replacing the Blockbuster membership and other such shifts. If you don’t think lean six sigma applies to your organization, here are some myths to keep in mind: It only applies to manufacturing companies. Many service businesses and administrative functions within businesses are adopting LSS in their processes. We are an accounting firm, but we have used the methodology internally on multiple processes. If there’s a process in your organization that isn’t handled consistently or there’s a place where there is a bottleneck or you just need to get current and update the technology and develop new procedures around a process, LSS is a great tool to get you to the next level. The principles are outdated. When I told someone I was going to lean six sigma training they said “That’s still around?” Lean Six Sigma uses principles that are as applicable today as they were when introduced last century. They are finding their way into service industries and administrative functions in addition to manufacturing concerns. We have all heard the phrase “The only thing constant is change” and that’s true today more than ever. Technology is developed daily that improves a current application or method. If you don’t adapt, you will eventually be irrelevant or your employee and/or customer retention rates will suffer because you are not current. Shall we discuss Blockbuster or Blackberry? It’s used to reduce the work force. Minimizing defects, thereby reducing variances and waste, is the objective of six sigma. If the entire work force is trained to follow a process in a particular way, variances and waste will naturally be reduced. “Control” is the final step in implementing LSS; when individuals have clear expectations and proper training, they can excel at their jobs. The implementation should then result in less turnover and better morale and help individuals advance through an organization. It takes too much time/money to implement. It’s true, it takes an investment of time and money, but the benefits should outweigh the costs. Where would your organization be today if you never looked to the future and saw that you had to make an investment of time or money? After implementation of a new process, related time should be reduced. Maybe you’ll get billing out the door a week earlier which leads to improved cash flow. Maybe you will implement a software package and/or process that will reduce errors on job estimates resulting in an improved bottom line. Maybe you will improve your delivery time by 20% to your customer’s delight and help growth. We can apply it ourselves with the same results. Sometime organizations know they need to revise a process and they pull the most closely related person or people in to see what changes should be made. Or maybe there’s an individual suggestions are made to and then implemented with that person as the gatekeeper. Although it’s great that the organization may be moving forward, it is likely missing out on many opportunities. Often individuals handling a step in a process have no idea the issues people in other steps in the process are having. Sometimes there issues may be related to variances: each person has their own way. But often there are ways to improve the process early on to make the entire process proceed more smoothly. LSS gives you a forum and methodology to gather individuals from different stages of a process to map it out, tear it apart and put it back together in an improved state. You get many minds, that think differently, in the room and you can collaboratively design the new and improved state. A facilitator can help ask the right questions to get you past roadblocks you may be having. These are some of the most common LSS myths we think exist. If you have others, we would be interested in hearing them. Article by: Claudia R. Wolter, CPA, CCIFP, CCA Claudia Wolter, a Shareholder with KatzAbosch, joined the firm in 1988. She has played a major role in leading the firm into the 21st century with cutting edge initiatives, including the transition to and managing of a paperless environment. She serves as Co-Chair of the firm’s Accounting and Auditing Services Group, assists in the quality control management and oversight of the firm and is a member of the Construction and Real Estate Services Group. Most recently, Claudia served as a contributing author of “Construction Accounting,” an in-depth guide to construction financial and accounting issues for attorneys distributed by the American Bar Association. A dedicated professional, Claudia holds the prestigious distinction of Certified Construction Industry Financial Professional (CCIFP), a certification held by less than 50 professionals in Maryland and less than 1000 professionals in the United States, the designation of Certified Construction Auditor (CCA) from the National Association of Construction Auditors (NACA) and a Lean Six Sigma CPA Green Belt certification from Ohio State University ATI and Boomer Consulting, Inc.